What Unitrees Evolution Means For Robotics

TITLE: Ep. 016 - What Unitree’s Evolution Means For Robotics (Robotics) CHANNEL: SemiAnalysis Weekly DATE: 2026-06-23 ---TRANSCRIPT--- Everyone that’s a Jordan welcome back to semi-analysis weekly. We’re jumping right into it with Nico and Raik this week to talk everything Unitree with their upcoming IPO, humanoid robots, and a few of the previous robotics articles that we’ve done on limit levels of autonomy, and quadruped state of the market. Hope you enjoy. In terms of how many deployments are actually real in the real world, right? It seems like robotics is like just getting started on the cusp of taking over entire manufacturing plants or

Yeah, not even, but yeah. I even on their industrial deployment, I think like even in our our writing, I I would like to call it we gave them a generous framing. For the fact that their their improvements have are very material, but with the burnout rates, the payload, and and like the internal accuracy accuracy of their hardware, like we’re in baby days to put it lightly. Um I’m actually not entirely certain even among the partners. We’re trying to get metrics of like what this would look like. I think they’re defining industrial deployment very broadly. Like most of these robots are like showing people around places and whatnot. But like at best, we’re talking about the frontier of deployment is like teleop to to pick up boxes and and stuff of this nature. Now, I I don’t think that’s true for general robotics as a whole, but their research playbook for them has been huge. Like so, industrial deployment true for robotics maybe as a whole, pace of progress on Unitree is on a bit of a different axis. I think the general point we’re trying to make is it’s hitting there really fast into a more capable set of a set of hardware form factors. Um but yeah, agreed. There’s Unitree, there’s there’s the research market which is like a thing that nobody took seriously, but then there’s there’s there’s robotics as a whole is to get on the eye capabilities. Really early days, but we are seeing it. And then there are form factors that obviously industrially useful. Um but those are more sophisticated, more expensive. Yeah, like we you know, like we weren’t we aren’t trying to make the argument so much as like hey, broadly in industrial deployments like this works. Like this is super viable now. Uh you can kind of just drop it in anywhere. It’s like not not totally the case, right? Um like you kind of have to think about all like the throughput and the reliability factors. And like yeah, like you know, in our article we have them they still kind of burn out quite a bit. But the point being is that like yeah, like the smallest task like it kind of works, right? Like and that’s all that matters because like a while ago nobody actually took him seriously at all. Yeah. Um so why are they going public? What are they going to public based on? Yeah, and China companies go public a lot faster, too. Right? Like uh sometimes it’s in like the the term sheet even of like you of this many years to go public. Sometimes people are like liable for the capital. I mean you guys know this as well as other other people do, but uh it’s a I think I think it’s kind of a necessity for them. Um uh And also, I mean their their revenue ramp is is not small, right? Uh the market that they’ve carved out for themselves is is growing, sustainable, and they they are the the dominant form factor for those use cases. It’s easy to use. Uh developer kit is improving. Um It’s easy Sorry, this is a revenue thing. You say revenue is healthy, but that’s just for being a tour guide. Yeah, and but also also like research and development and hobbyist market it it’s a bigger market than I think people internalize, right? Yeah. Um and like uh and like to be fair to um like revenue is healthy, but in the sense like they were uh they were charging a lot for these robots before, right? Like like quite a bit. Um like even, you know, when we have it in our in our bomb where it’s like “Hey, at 27,000 pre-tax price, like these are still 67% gross margins, right?” Which is like absurd. Uh, and it’s mainly because there’s really not that many players that are going to kind of like, you know, bring down the price yet. So, it’s kind of just unitary in there gouging the living hell out of the market while they can. And then like, presumably, you know, these prices just keep dropping, but that’s like a big I think a big reason for the revenue being so large is you could charge before like $54,000 for these robots that would like burn out in 5 minutes. And now it’s like, uh, you know, 30K now. So, it’s like huge drops. They’re also able to produce at scale. Uh, they’re able to produce the robots at at a unique scale. Their iteration cycles and their improvement on the engineering is super super super super fast. Such that they’re trying to kind of burn the bridge behind them a little bit. Uh, in terms of Okay, if I drop the cost of this robot, you know, and the the American bots might be trying to go and all the way zero to 100, you know, uh, you know, perfect dexterity in the hand, strong payload, uh, you know, make all the new innovations. And and and basically their bet is I’m going to make an extraordinarily cheap robot that by the way, we’re also all trying to go over and figure out the software for how to solve the controller, how to do like a, you know, interesting AI models to make robots useful. Turns out, uh, the experimentation you need hardware that’s that’s cheap, useful, like it’s going to break. Uh, you know, you have a good service time. Like, you know, these things need to have experimentability. And they’ve increased their capabilities on the hardware side as they’ve grown as a company. So, it’s a, you know, sort of a a bottoms-up approach to growth in in a way that is very amenable towards like, you know, DJI’s capabilities and etc. Which like not the the great, you know, strongest of drone So, it doesn’t Yeah, I I understand the comparison to BYD and DJI because of the burn the bridge behind you sort of thing that’s described, which seems like a reasonable competitive tactic if you want to take the whole market and you have the ability to do so. But the in both of those cases like it seemed like there was a healthy market for drones and for cars before those entrants came in. Maybe EVs or like autonomy was a different part of it, but um there were a bunch of players. Robots is like specifically humanoids, it’s not like there’s an incumbent that they’re trying to compete against. They’re pretty much defining the market and growing with it. Um which makes me think about solar panels and how China has like nine of the top 10 players in solar panels. Like if Yes. No. Um do you believe that they will have competition in China and they’re just pulling up the banner against the US basically? I think the article’s core purpose in in all seriousness is uh is is a few things, but one of one of one of the core things that was the one of the main motivators here was trying to communicate uh the level of importance of economies of scale in this market. There’s obviously a ton of AI tailwinds, right? This is this is the obvious point. Right? Yeah, like people happen to have bought cars for a while for BYD, right? Like uh EVs, you know, a different situation, but this is a an obvious an obvious thing that uh it it is separate and different. Drones drones are similar in this regard. This is definitely an AI demand pull, right? Uh you know, language models have become extraordinarily powerful economic vehicles and tools or whatever you want to kind of refer to them as. Uh robot models from a research perspective of like kind of shown their their early signs of of of life, right? Uh and I don’t really think that’s something that anyone wants to wake up one day and you know, say, “Oh, wow, we missed that boat.” Right? China’s been a huge leader in industrial automation in general, right? Their robots per worker are higher than the US. So, like in this is, you know, caught more classical industrial automation, like, you know, single picking place, like, you know, things for like, you know, mobile electronics, etc. But, even their their cobots are getting much, much stronger over the years. Getting much cheaper. They’re They’re not as reliable as some of the European and and the US ones still, but they’ve improved rapidly, right? Uh and so, this has kind of been a really, really big mandate in in China anyways, like extraordinary amounts of automation. And so, they’re they’re well positioned because of what they’ve done in mobile like electronics period, like consumer electronics, and then on automotive markets uh to kind of really see this as a serious thing given the markets that they’ve done well in prior. Um So, between the fact that this is within their core advantage already, uh the things they’ve grown very heavily in in in consumer electronics, uh and in automotive, and the fact that the AI talent is very, very, very clear has allowed them to be very forward-thinking about how to build in the hardware ecosystem early on in the progress the progress of the AI. Um I I kind of want to add here, too, like uh Jordan, I think you’re you’re poking on a good one with uh the DJI comment, like um the fact that like, you know, DJI sold into like the drone market, but in the in the paper we like try and really point this out, like there was no kind of consumer drone market, right? Like this it wasn’t a thing, right? You You go around in like the early 2010s, and it’s like a bunch of like dudes in their mom’s basements building the drones for like, you know, maybe a couple thousand dollars, or you go and you buy like the $20,000 one that like is like military grade, basically. And so, it’s like there was no sector for this to begin with. And then DJI kind of comes in, brings out like a pretty mediocre product now, but at the time was like kind of groundbreaking because it was affordable, it was functional, it had like a camera, it could it was like stabilized enough to be like a useful drone for like anybody that actually purchased one and wanted to use one. And then all of a sudden like and this is where you know, it’s nice to remember my numbers. Um after like that first release of that drone, I think they went up to like a hundred million in revenue. Like out of like after like two years or something. And it was like, oh like Yeah. Huh? Say 130, yeah. Yeah, yeah. And it was like, oh so this, you know, like this market didn’t exist before, but like you can kind of just invent one almost. Like show people it’s useful, it’s like cheap enough, and customers will kind of just arrive. Um was really like kind of the DJI move there a little bit. And like Unitree it’s you know you’re talking about DJI. I’m going to throw this on screen so we can take a look at this drone. And the numbers you’re you’re referring to. Yeah, there we go. 4 million to 130 million. Crazy, right? Um and like it’s not to say that like, you know, Unitree is like booming and originating the like whole humanoid market right now, right? Because it’s so small. Like it’s hard to you know, totally declare that. But like hey, if it happens, like you know, we we kind of point we pointed out a little bit here. Um this is a pretty competent company. They’re creating robots that are pretty useful or not pretty useful, but like becoming moderately useful at a reasonable price. And like in the past this has been really successful for like just initially getting a customer base customer base and then scaling upward and growing and growing and getting better. And now it’s like you know, DJI’s just everywhere. I think um it’s it’s not a super galaxy brain to state to go over and say that just like drones, uh people had a very strong interest in them, but they they were this, you know, novel, extraordinarily expensive technology that was like basically licensed to governments or people that could afford them. Um there is an a surprising amount of people out in the market, both within like small companies and hobbyists that I think again, to Rex’s point, you know, on the on the drone side is is is really a like a a cost problem, right? And Unitree has essentially doubled down on the fact that when they made their quadruped cheap enough, people have questioned very, very seriously like what is a quadruped market? Now you can make the industrial argument of the fact that uh you know, there’s enormous amounts of uh sort of like uh uh progress tracking, security use cases, and etc. that I do think people deeply underrate, but that’s not the main thing quadrupeds are selling themselves into. People want to buy a robot dog and see what they can do with a robot dog, right? Whether or not these people are extraordinarily non-technical and are are playing with quad code and running experiments. Uh you see social media influencers doing it, but also just like reasonably competent engineers throughout Europe, the US, China, who are just trying to see like what really is this technology? And if it comes down at a at a to a reasonable price where someone uh that can like uh on a you know, white collar wage can go over and, you know, save up to buy it, there there’s a surprising number of people who wanted to go over and play with it in the same way that you would have with the drones. Um I think the uh deeply peculiar part about all of this is and and actually this is a, you know, pretty awesome chart to bring up around this time, is, you know, a few years ago this was a quadruped company. And people really didn’t care about them, right? And I think, you know, uh I know I know I didn’t, you know, really make this point yet, but one of the motivations of the article is is um this was a quadruped company. And the the economies of scale of like finding a market that people just really want this product, they’ve been able to bring the cost down, improve their hardware, make their engineering more reliable, improve quality across the board, make a product that people love, which has given them the mandate of heaven to make the next product. And because they have the mandate of heaven to make the next product, they’ve been able to go up the stack of capabilities, shrink the cost then again, open up a wider and wider market every time. And as they grow as a company, they’ve been able to make products that are more and more capable. And uh, you know, I I tell this to pretty often as we as we work through a handful of the articles we’ve already collaborated on. He’s like, “Economies of scale is is is like China’s scaling law.” Right? Like Like and we see this time and time and time again of the oversupply strategy really really working well within China. Uh, and we’ve seen it several times now with enormous businesses that started in like funky weird ways uh, that have surprised people by the fact that they just don’t stop iterating and they just don’t stop innovating. Yeah. Um Let me Let me try to formulate two things quickly. One Yeah, sorry. One is like I want to Yeah, I’ll go first. I’ll go first. I’ll go. You guys both You guys both seem very convinced that like demand for humanoids is just obviously going to be there when the cost drops and the quality improves. Quality of both AI capabilities and hardware, yes. Yeah. Right. This is like um um kind of the arguments on our like levels of autonomy paper. Going to hearken back to this one for all the all the readers that remember that. Um the like point of levels of autonomy was to show like, “Hey, you you don’t need to have the highest capability in order to be like a useful robot. You can be doing very basic tasks. This is why we had the quadrupeds paper where it’s like, “Well, okay, like Unitree has good quadrupeds, great. What does that actually mean, right? It’s just like it’s just a dog walking around. Like, who cares?” But then like oh, you can actually find some use cases with it, right? Like, you can have it do the scanning at construction sites, which is like a very expensive job to do all the captures. You can maybe have it do delivery in some of the like locations which are really bound by like size, so it’s weird to get a car into, so it’s actually economically challenging in that case. Yeah. And so like um and so you don’t need I I don’t my humanoid doesn’t need to be perfect, right? It really doesn’t. It just needs to be able to do like a few things that I want it to do, and it needs to be able to like break kind of even on a cost basis with like another human doing it, right? And that’s kind of where we get to that whole heat map scenario where we show like, “Hey, it’s really not like we’re not like telling you this is a phenomenal robot, right? Like, we make it very clear. This is not like the cream of the crop perfect robot right now. But it’s like, “Listen, even with all of its challenges, even if you assume 100% teleoperation, even if you assume mean time failure of like what every 20 minutes, right? And it’s like 5 minutes to repair, so it’s like 15 minute or I don’t know, whatever. And like you compare it to a human of it doing this task, it’s actually just a little bit better. Like, it’s just good enough to where you can actually put it in a warehouse and like have it do something. And we don’t have it doing the craziest task, right? Like, we’re not telling you, oh, like I’m moving, you know, 200 things a minute out of a box and you know, it’s like I have to think a lot and how to sort it. It’s like no, like I’m just taking this box and I’m putting this box right there. Like like very basic, but like that’s a whole job, right? Like that’s a whole job. Yeah. Okay, you’re making me think of an analogy to the ChatGPT moment 2022, maybe the cloud code moment a couple months ago, 6 months ago, a year ago. Like the it seems obvious to me that demand is there. Um, but we’re also going through the experience where like there’s an indication this is going to be incredibly useful in the future, even if it’s just really narrowly scoped right now. You don’t think there’s anything obviously limiting the hardware from improving on a reliability perspective and the software or like general operation of it improving on a quality perspective so that it can do more and more economically valuable tasks more reliably over time. I think there’s there’s a few things to this, right? You know, one uh Not not to rewind, but like on the basis of, you know, touching on like what what is the ChatGPT moment, right? I I tend to take this as a bit of a misnomer. And and the reason I say this is uh when you know, we got you know, yeah, Sunan 3.5 or 7 or how depending on how religious you are of like when code came online, right? I don’t like to uh talk about like when code is solved because code has become extraordinarily extraordinarily more uh capable from language models. I don’t think many people that are are serious would call call it solved. Um but uh it’s gotten very very useful, right? Uh robots, in order to deploy, need to reach a certain level of like nines of reliability in order to deploy. So, you are not really a complement for very long like an economic complement, right? You are you are trying to replace an individual unit of labor. I wouldn’t say you replace a person kind of thing, but you’re adding to capacity that would be someone who who would have done that task, right? Now, um what does that actually look like in practice? Well, that might be legitimate you know tele-up words like a cheaper person from a from another geographic region that’s like controlling the robot that’s ideally a very high level of autonomy. That’s being you know potentially like corrected by a person. Hopefully that person is helping correct multiple robots at once. Um And these things don’t have to be just humanoids, right? We see a lot of two arm manipulators on wheel bases. And it to raise point these things kind of scale up over time. And the hardware will improve over time. The claim we’re trying to broadly make is that there’s not that there’s not a lot of work to go, right? People have debate on whether or not there’s going to be the tendon based arms are going to do a Wuji and sharp arm doing which requires enormous precision, great machining, like very very difficult problems to solve on the hands still today. Whether or not you need a hand it’s depending on the use case. We have a long way to go on that software and a long way to go on the hardware. In the same way when code came online, we had a long way to go. We had a long way to do for autonomous research. We had a long way to do even for things that have to do with white collar work that’s not in code and like less verifiable domains. In the same fashion, you will have some things come online for robotics that like take a lot longer due to the reliability, but you get this interesting way to look at the problem where you say, “Hey, uh you do get enormous demand shocks like that are extraordinarily powerful that give enormous amount of capital into the ecosystem that I think people don’t deeply internalize. Can you explain the demand shock you would you would foresee happening? Uh like it like again as as the price has come down and as the capability increase some go-to-market opportunities will offer enormous amounts of pull into capital into the market, you know, talent into the market and investment into the customers. Yeah, like you have like for example Yeah. Yeah, like like for example we we we highlight like a few of the use cases in the autonomy paper where it’s like you’re at the point now where you know, your kind of robot is capable on like a few axes where it’s like throughput, reliability and like the kind of failure tolerance of the task itself. Um where it’s like okay. Right? In the autonomy paper my one of my favorite ones actually is like the cooking robot, right? Where it just uses like the two arms, you know, to like stir some onions, right? It’s like a okay, like super basic. I can’t really like botch that, right? I mean like I’ve I’m a robot. I have a timer in my head. I can like see how hot the pan is, right? Like I’m not going to burn anything. Um and so now you’ve got okay. Well, the robot can cook, right? Like how many line cooks are there like globally, right? Like this is a huge like pool that just opened up just cuz the robot knew how to like stir the onions, right? And like big big demand shock that like Nico was saying comes from like something like that where it’s like oh it’s it’s doable, I guess. Well, and and and again the the fun part also you know, shout out Kochev. Uh uh I I think the the fun part about this is what people kind of forget in Western markets particularly, right? Uh we’re having enormous attrition in some industries, right? So when when Rick points out like why do we have to be only a little bit better than person? Like what is that really mean, right? So let’s say the robot’s still not at human speed, right? So it depends on one what the requirement of the task is, right? Is it a high throughput task? Is it a low-throughput task? Is it a high dexterity high mix task where you’re doing a bunch of different types of things? Or you’re doing something where the space is still reasonably constrained, right? And uh there’s different ways to break that down, whether it’s relative to uh if the failure mode is catastrophic. When you consider catastrophic failures like, you know, are you hurting someone? Are you breaking something that’s expensive, etc. But uh so you can kind of break down this task in a few ways to what’s ready and what’s not ready. But we want to look at something called the loaded cost of labor. Which is not just how much you’re paying someone, which, you know, if it’s a minimum wage earning job, which many of these robot applications are not for just minimum wage, but if it’s minimum wage, these things tend to scale linearly over uh inflation and regulation or whatever, but it’s relatively linear over time. But the loaded cost of labor is something that has been somewhat non-linear in places like the US and Europe, where people are just quitting at higher and higher and higher rates. Hiring gets more expensive. You have to do more investment into it. And so that makes the cost of onboarding someone, skilling someone up, and uh finding people really, really, really difficult on the business. And so if you can get a robot that works like half the speed, but you can get it to work two shifts, or maybe the speed requirement which you get like 70% as fast as a person, maybe it doesn’t really matter anymore because your output ends up still higher. Or maybe you don’t need rework, right? Maybe the robot doesn’t make as many visual mistakes. Uh and then, you know, it might be slower, might make manipulation mistakes, but maybe it doesn’t make visual mistakes, and that’s usually what you tend to see as the case. So what is the unlock for an application happens to many axes that’s very domain specific. And so um when we talk about these demand shocks, they’re going to come in many forms. They’re going to come through businesses that are entirely robot oriented, that were service-based businesses. They’re going to come from things like cooking. They’re going to come from things like I mean like kitting, Uh uh you know, insertion tasks are going to come online reasonably soon depending on like again the level of catastrophic failure. We’ll see a lot of things in logistics. Uh sorry, I’m sorry. Yeah, they they like data centers is like the the really fun one that a few folks are going after which I’m pretty exotic about because uh you know, the cost of electrician. How about like non-linear prices, right? Like you you guys have called this out a few times. A lot of the the AI, you know, fast takeoffs approach are like, you know, everyone’s going to turn into an electrician. We’re all going to turn into an electrician. Which is like, you know, that’s going to be fun. I I you know, I got that sounds like a really awesome way to spend my day just like unplugging and plugging in server racks for uh for like all of all of society and they’re all going to we’re all going to have a game competing on this kind of stuff. But uh and and and and the thing is is like the market for that is massive, right? Uh now, whether or not it applies to the neo clouds or not is like uncertain just because of like, you know, what their scale is, how fast they’re building out, and etc. But with with the massive infrastructure build out, even on bring-up, sure, an enormous value-add. But people underrate maintenance and how sticky that revenue is going to be, right? Data centers are in sometimes remote places. Like sometimes it’s hard to find a very skilled electrician. Uh these are serious things. And um you know, the robot advantage task is not always even just you know, pricing on uh the labor, but sometimes it’s just an enormously value a high value-add use case where the business really, you know, highly rates it. Um and they’ll pay a lot for it. And there’s a lot of tasks where the business is really really really going to pay a lot of money for this. And that’s not just on data centers, in many other tasks it’s the case in construction and in logistics and things where this is true, too. And we’ll see new businesses spun up on this end where people do things in a robot-native way, not just an AI-native way. And I’m I’m quite excited and for things like this. Um and that’s not just a Unitree thing, right? You’ll you’ll see other form factors, other companies. Yeah, we’ve been we’ve been covering a lot of ground on this so far talking about not just the humanoids, but obviously Exactly. quadrupeds, all sorts of robotics, which I I think it’s all all related. But maybe we can go back to Yes. the one of the points from earlier, which is like um Well, I think there there’s two things. Uh if we’re comparing the humanoid market specifically to previous um markets that a Chinese company has come entered into and then dominated, whether it’s drones or solar panels or electrical or anything else, consumer electronics. Um you say that economies of scale is like a key critical component of that. I’m curious if you can talk a little bit about the like Shenzhen consumer electronics ecosystem that powered some of the existing ones and like how that might come into play here. Specifically, I’m just going to show this picture on screen that I love from the article where you can see Yeah, it’s so cool. just like visually see the supply chain. scale of this thing, yeah. Yeah. It’s amazing. Yeah, it’s Huaqiangbei. I’m totally botching that name, but yeah. So, I’m taking it for granted a little bit. Maybe for the people who are audio-only, like this is a picture of a yeah, I think so this is Huaqiangbei. This is an electronics market in I believe Shenzhen, where it’s like I think it’s a seven-story building of just like consumer electronics parts, right? Like the like the entire supply chain for consumer electronics is just in this tower. It’s like unbelievable. You can go in there, you can buy your microcontrollers, you can buy any like any field-oriented controller you’re looking for, you can buy any camera, you can buy, you know, any um IMU, whatever you whatever you want. You go in there, you you show up with your, you know, your yuan or yuan or whatever, and you pay throw it down, and then you walk out, and you have every single part you need to build a drone now, right? Like all within a single building. It’s like phenomenal. It’s like just one part of kind of the whole uh like Guangzhou, Guangdong, and Shenzhen area, like the Pearl River Delta. It’s just like one part of it. Right? It’s like everything is in this region. Um Yeah. Yeah, I totally not answer your question on the economy of scale thing, but yeah. No, but let’s let’s tie it into like what I thought was the coolest graphic in the uh Humanoids Unitree article, which is where you guys go through the bomb of one of these humanoids, right? There’s arms, waist, head, torso, legs, and you’ve got all of these individual components. And conceptually, like I can zoom in on just one of these, like the torso, let’s say, right? And there’s going to be battery system, there’s going to be a CPU board, there’s going to be a video jetson x and x. Maybe that one’s a little bit different, but like the legs where there’s gearbox motors, joint drivers, linkage bar, bearings. Um I mean, if you look at all of these uh components, maybe this Can you talk about like the supply chain in the humanoid context and how this compares to what China has done with consumer electronics? Like, what components are shared? What components already exist? Is the whole supply chain just already done? Like, what’s like Yeah. Yeah. So, I think like for I mean, this is a bit of an overstatement, but I think like an okay portion of this was already kind of helped out by the original consumer electronics market. Right? Like, most of your kind of standard controllers are going to come from the like original the original supply chain there. It’s like there’s injection molding for your plastics. There’s going to be motors, right? Which are like pretty standardized nowadays. Different like we’ll get to the humanoid aspect, but um point being like there’s a lot of the base components are pretty common throughout China now. What’s kind of interesting with like the Unitree in the humanoid case in specific is you’re watching a kind of ecosystem form around Unitree right now. Or not Unitree specifically, but like, you know, the Chinese humanoid market. Um where people are now making a lot of these planetary gearboxes, right? Which is like what goes in Unitree’s arm to make it move correctly. People are making a lot of these now in the right spec and size, which was like not really necessary a few years ago, right? Like this wasn’t drones don’t really use gearboxes. They’re like mostly just kind of high-speed motors. Um these are like cropping up It’s like every province now has, you know, somebody that cuts your gears, basically. And it’s like, well, nobody actually needed these gears before. Um and then you look around and it’s like, oh, well, I think there was like that one article where it’s like I think there’s 200 humanoid companies in China now. It’s like all these kind of keep cropping up and like the like massive amount of these guys showing up is like what just eventually drives all of these kind of new suppliers who just come in and be like, “Hey, listen, I got a gearbox for the low. Like, I’ll sell it to you. That’s fine. Like, you know, be my customer. We’ll both do this together. We’re going to get on the humanoid wave right now.” And now like you have this whole kind of supply chain convergence onto like not specific, but like very certain architectures that work really well for humanoids that just like doesn’t exist outside of China. Not like really not at meaningful scale, right? And so you’re What are you kind of watching this build in real time? And Unitree is actively benefiting from it. Um I can kind of really um gush over the bomb, but I’ll I’ll I’ll withhold for now. Um but well, maybe maybe we can extend this a little bit to uh Yeah, maybe we can extend this to like how this influences the development of the next versions of the systems and specifically the reliability and thermal problems that people are seeing right now. Yeah, I think one thing to harp on, too, is it’s not just uh the mobile side, right? Um again, we we we’ve mentioned not just DJI, we not just the fact that, you know, they have a few phenomenal uh phone companies in the country that have grown at like extraordinary rates over the last decade or two. Uh but it’s it’s it’s their automotive, right? So, the contract manufacturers for a lot of these robotics companies are the same contract manufacturers or adjacent talent to the same contract manufacturers that allowed the automotive market to grow to the size it is today, and that’s why it’s still growing so massively. I think uh to to point out to, you know, the electronics market, the reason that exists is cuz they have an extraordinarily diverse ecosystem of many, many, many players that are small. And uh I’m forgetting the term, that’s a huge shame because the the there’s there’s there’s this uh it’s just like going to be misquoted. Uh but uh there’s a friend of mine uh who’s talked about this, like, you know, it’s a a sea of a thousand bosses, right? Like, so, there’s some guy who’s the best in the world at making a specific component, who’s been doing it for 20 years for your for some X number customers who you he he knows so well how to go over and get the great yield on his machines, how to improve his machines, how to go over and understand how to make the part like perfectly and make it super quickly, in fact, you get it the next day. And they’re all competing. He’s got, you know, some absurd number of customers on a relative basis to the US, and if he can’t go over and make that part at the level of quality, precision, and reliability at something where the unit economics work for him, where he can continue to lower the price, cuz they’re super competitive amongst each other on price. That they can survive. Uh their competition allows the consumer like the consumer of the of the different vendors. Uh they all benefit from from an extraordinarily price competitive market. And so their quality is basically been from the pressure of the internal community to survive on their own. And and this comes from the fact that you have several markets that are all hardware markets that are all basically benefiting the the level of complexity technology that was required to build to make things like humanoids. Uh you know, other form factors as well, but the fact that they have a diversity of technology to experiment across the spectrum is is where they get these ecosystems from. This is not a new ecosystem for them. It’s a derivative ecosystem. Um I think that’s the thing that people really don’t get is like when when when our production for Apple went over there. Uh when when when when we built up their their supply chain from the US, they they haven’t stopped. They’ve made a newer and stronger and cheaper products and their manufacturing processes have created this massive second order effect of these businesses that have serviced all these large companies as they’ve grown. And they’ve become extraordinarily competitive markets where they’ve just become really really great uh you know, you know, a wealth of domain and tacit knowledge that allowed them to survive. Um so that yeah, these things matter a lot. Yeah, makes sense. Okay, I got uh I got one last question and then we can move to to wrap. We we covered it a little bit at the beginning, but maybe you can do it in more concrete terms like this maybe the whole theme of this podcast so far has been quite positive and and quite like um you know, like there’s a lot of excitement around humanoids in the industry specifically. But there are uh big differences between like the deployment versus hype right now. Um I know we start maybe we started out talking about that a little bit, but like what are the let’s say there are 100 plus humanoid companies and inter-province competition in China. Like can you make the bear case for Unitree where somebody comes along and outcompetes them for the entire unit humanoid market or they have less success than you’re you’re currently expecting? Like what would that look like? What are what are the challenges they still need to overcome, you think? Yeah, I think this is this is difficult, right? I mean I I’m not going to sit here and say I I have a I have a magic ball crystal kind of a crystal ball to kind of see how this plays out in perfect form. The there’s many players that are emerging. You know, there’s a new humanoid company in China every week it feels like and they’re building robots. You know, it used to take you, you know, several months to go over and spin something out that looks remotely okay and this like gives a lot of credit to the supply chain aspect of things. You know, you’ll see a new company come and be like, “Oh yeah, in 2 weeks we just made this robot and it’s walking and you know, it does a triple axis backflip and all these crazy crazy things.” Now, granted the dancing isn’t that big of a deal to be honest. Like talk about a Okay, what’s your what’s your favorite demo you’ve seen so far? I I I’m boring, right? Like I want I want things that are hard for a robot to do, which is repeatable precision things that require onions? What What are you I I mean, to be honest, like I’m a big fan of data zunders. I’m a bit like I want to see assembly. Like I want to put these things put together a bike. I want to see force and torque and janking things around. Like I want to see real like dexterous manipulation that requires force and torque understanding. Right. Unitree’s not on like a clear path to having that directionally figured out just scaling up what they’re doing today. Yeah, yeah. Like what’s your what’s your favorite demo? The the spring gala where they’re you you can If you watch that video, that video kicks so much ass. I’ll be honest. That video rocks. [laughter] Like you go and you look at it and they’re doing like the lead like the parkour over the boxes. That video is incredible. I’m a huge fan of that one, but I mean dancing, don’t you? We We found a disagreement here on the podcast finally. It’s easy for me to It’s not easy for me to dance, but but the the robots the robots are born to dance. Like I Like the robots are born to dance. It’s low accuracy. They can They can [ __ ] around. They can land on the wrong spot. It’s still going to look cool. Uh and that’s the thing It’s just that you know the thing is it’s just it’s it’s better than me. So I I I can’t uh I have to let my humanity performance in in the marathon? Or is that boring to That’s a really big showcase of of the burnout not happening as as long anymore. Yeah. Yeah. Exactly. That’s just cool actually like removing uh my my view like that they could be better than me, but like uh the fact that they can run at long distances now it is a is a scary from a Terminator perspective, but really impressive from how far we’ve gone on our how long our motors last. So I got I got to give it to the guys, you know. Yeah. We’re too We’re too practical over here, Jordan. But I will say um I do like the uh the kind of social use cases of these things. I’m not even social use cases, but like um in this it’s like to be clear, I don’t want this segment to be us like, you know, making Unitree into a joke, but I do want to point out that like these robots are pretty funny. Um like big fan of kind of the the robots where they have them walking around the street and they’re just saying outlandish [ __ ] all the time. [laughter] These ones Being fan of these ones. Like don’t get me wrong. Uh but not exactly taboo. Yeah, people love the bots. People love the bots. Come on, you know. It’s like It’s like this 4’ 11” dude just walking around like saying whatever and it does like back not backflips, but like it’s like doing dances and stuff. It rocks. Like I’d have this guy around. I actually that that reminds me I think I think I saw one of our colleagues ask one on a date a few weeks ago, yeah? I heard about this. I heard about this. Shout-out to Michelle. No, no. Um Yeah, Michelle. I hope that one went well. [laughter] Godspeed. Okay, so I like I didn’t mean to go on. I derailed that a little bit. Yeah, do I think Unitree’s going to have some serious competition now? Yeah. 100%. Uh but are they are they in position to benefit Look, yeah, like it’s more of the strategy, right? Unitree is an emblem of what China has been able to do, and they benefit from their ecosystem. Every buck produced right now, even in the US, benefits their ecosystem because our supply chain heavily relies on them, right? So, they benefit from themselves, and they benefit from us currently. And then the customers. Yeah, is kind [clears throat] of getting Is Unitree going to get some competition? Yes. Are they going to be a great business? I put my money on like if I were going to a handshake bet, I’d say they’re going to be a good business. I wouldn’t count I wouldn’t count them out of the great research market. culture. You guys said this at the beginning, right? This is like Silicon Valley-based startups raising venture capital to develop robots for all sorts of different areas who are then taking that capital and buying Unitree humanoids to put in a warehouse in San Francisco. Yeah. And that’s like maybe the biggest part of their business right now is like R&D for future stuff. I think the warehouse that they like as an example was a test case for us to show that some people were attempting to go to market with them today. I’d be hesitant to say that that’s like in any form the majority of their use case. The majority of the use cases, you know, universities. I mean, granted, you know, things are changing now with new governmental regulations regulations in the US. Like that will curb that quite a bit, but it’s the fact that um Unitree’s done a really strong job of selling to researchers who need low-cost robots that are still usable, serviceable, and strong uh like a good you know good to go over and train AI models with. Um, I am by the way I I do say this very seriously. I I am bullish the US in being able to compete in this market. It’s going to be very hard. But, the US does take this increasingly seriously to make sure that we you know have some form of our own supply chains is very very very difficult. I think we’re under invested massively. We don’t have you know metal processing. We don’t have our neodymium production is too low. We all the chemicals if we wanted to set up processing plants are still going to come from China. But, we don’t make a lot of PCBs here. We we don’t know how to go over and make it we can wind our actuators, but they’re you’re still going to you know have them produced mostly in China. Like these are really really big problems. But, uh the the necessity as the AI progresses is going to just I I you know encourage us to have massive massive massive investment. Um, right now China’s just in a phenomenally advantageous position for themselves. And and this to me this article was was was also a tending to be a wake-up call saying like you you don’t have to believe that we are at you know you know what Optimus’s dream is what Figure’s dream is for having like the full-fledged you know you know zero to a hundred level humanoid to go over and show that this market’s moving. And the point of this article is that this market’s moving. Uh the technology is showing signs of life in a unique way and the supply chains are very very clearly feeding into that increasing attractor state over time where their advantage is not going away anytime soon. So, to look at them like a toy company when they were just a quadruped company a few years ago, I wouldn’t ever count these guys out because they’ve already shown enormous progress. I mean I’m sure by right we’re going to see a lot more from different companies in China, but we won’t we won’t US is going to put quite a bit of effort into this as well. Yeah, it’s the fact that they’re even getting into this market at all is like significant, right? Like this wasn’t even this wasn’t in conversation a year ago basically. I do want to like I want to I want to harp on like one thing here because this is a bit more anecdotal and I think in the piece it’s really one part of it’s not in the piece and the other part is in the piece but it’s a bit highlighted or it’s a bit like looked over is like the kind of scaling of the Unitree like pro like the Unitree project as a whole, right? Like we mentioned, you know, they came into quadrupeds. They go boom, okay, great quadrupeds work. 95% cost drop. We’re shipping, you know, tens and thousands of these things now. Excellent, right? Like this works number one. But we like really wanted to kind of we couldn’t draw a perfect one-to-one correlation. So like the paper doesn’t say this explicitly, but in my heart of hearts um the kind of idea was you get your actuator for the quadruped good enough, right? And a lot of the systems designed for the quadruped good enough, right? A lot of the actual mechanics, what you’re putting into the robot, all the parts, you get this good enough, and then you can just kind of transfer a lot of the like actual components toward a humanoid, which is what technically the original H1 was. And in the in the piece, we mentioned this, super cool, such a good data point, like I love the guy for telling me this. There was some some guy close to Unitree, but the the H1 was originally designed as a quadruped standing on two legs, right? You like you look at it and it it’s so crazy. Like you look at it and it’s it looks bizarre, right? It’s like the legs are already bent like the quadrupeds are. You look at it walk and it kind of does this thing where it patters its legs a little bit. It’s it’s designed to be a quadruped on two legs basically. And so it’s like you go from that and then you look at like then we can like look at the S1 where they shipped like what was it? Like 400 in the beginning of 2025. And then it suddenly jumps to like 4,000 like over the next 9 months. And then 3 months later in January they go, “By the way, we’re actually we’re at 6,500 right now.” Right? Like visibly seeing the scaling happening in real time. It’s unbelievable what they’re doing right now. Like just it’s early stages, obviously, but like this is super impressive. Yeah. Okay, guys, we’ve got to move to Rob here, but this has been great. Anything you think is uh left unsaid? Um I hope uh early stages are here. Like I I think I think uh it’s it’s no longer sci-fi and I I think it’s going to get increasingly weird over the next like 4 or 5 years. Like uh First inning. Play ball. And uh yeah, game began. The game began, all right. Would you would you would you get a G1 in your house, Nico? Or would you get an H2 in your house? I don’t Yeah, again, like I’m a little security concerned. Like I do think this is real. Uh I I I I do think the geopolitics is going to get very peculiar. Uh the US needs to prioritize this kind of stuff. Uh we need to figure out our own supply chains. Unitree is a phenomenal company. How how these things develop is is is going to be, you know, uh Yeah, I’d to put it lightly. Uh would you would you get one, Rick? I you know, it’d just be kind of freaky to look at it in the hallway. That’s the only that’s my only problem, right? Like I wake up to get a glass of water, it’s like this [laughter] 6-ft dude like I got that side by door. Start with a roommate. Yeah, [laughter] yeah, I’ll get If you can’t handle a robot folding your clothes I want a robot folding my clothes. I’m pretty excited for arm robots. Yeah, I’m I’m I’m I’m excited for the clothes folding robot, you know, it doesn’t need to walk and look like me, but I could do a close folding robot. That’s fine. Put a Hawaiian t-shirt on it, it’ll be fine. Yeah, yeah, put some sunglasses on him, call it a day. What? One for the one for the floor in the apartment complex? So it just goes door door-to-door and folds your clothes every now and then? You don’t have to I’m I’m pretty excited about it. A robot as an amenity. Like I actually like I’ve been waiting for this from me for years. Uh I I I’m pretty excited a robot as an amenity. Like uh you know, hey, like my my my apartment complex has a gym. Like yeah, my mine has a robot that does all my stuff. Like that’s going to be pretty cool. [laughter] Give the clothes to the robot. Keep going and say like 100% to do that. 100%. Yeah, makes sense. Okay, guys. Thanks for joining the podcast today. Appreciate it. Nice job. Nice job, guys. Thanks, guys. Have a good one.